Blockchain technology can help enhance transparency, efficiency and grow investor confidence in Zimbabwe’s fledgling capital markets, experts say.
The technology, which underpins crypto-currencies like bitcoin, is temper-proof. Its decentralised nature allows for financial transactions to be traced throughout the payment process by anyone with a computer or smartphone with internet connection.
These characteristics have meant that blockchain technology is now being adapted for use in several spheres including the supply chain, banking, financial markets and even voting, to curb fraud while improving transparency.
Zimbabwe Stock Exchange (ZSE) chief executive Justin Bgoni told our Harare Bureau that the exchange is open to exploring how it can harness Blockchain technology in the near future although there is still no regulatory clarity on the matter.
Mr Bgoni spoke about introducing blockchain-based new products and services such as real estate investment trust securities (REITS), mineral commodities exchange and exchange traded funds (ETFs) as key to expanding the market into a vibrant exchange.
“It’s something (Blockchain technology) we need to look into, though not now, the technology is very good,” Bgoni said in an interview at the inaugural C-Trade investor conference day in the capital last week,” he said.
“Each transaction, you can see who owns it so it is easy to audit it that is why people like it, is easy to verify it, it is transparent and takes away fraud, that part of the technology you can see everything and it makes sense, it is definitely an area that ZSE can explore.”
Elsewhere around the world, some stock exchanges have not only adopted Blockchain, they have also started to offer crypto-currency-related products, in a move that’s been viewed as key to introducing crypto-currency to conventional equities investors.
In April, for example, the Jamaica Stock Exchange announced that it was starting a limited pilot to trade bitcoin (BTC) and ethereum (ETH). The move by the JSE is the latest in a series of announcements that aim to open the doors to crypto-currency investment.
In the US, Nasdaq, the world’s second largest stock market by capitalisation, has recently listed BTC and ETH indices, while Switzerland’s main stock exchange, SIX, listed a ripple-based exchange-traded product.
Mr Bgoni indicated that there was no clarity yet on regulations governing the trade of blockchain-based virtual currencies in the country.
“Then there is the money side to blockchain technology. This is a bit difficult, in terms of regulation, we are not yet clear on this and we do not want to do something where regulation is not clear as an exchange. But the technology side is very good,” he said.
It will be interesting for the ZSE to adopt blockchain that will create a safe, efficient and transparent regulatory framework.
